Not So “Excel”lent – Why Payroll on Excel Is a Recipe for Disaster

In the context of payroll processing, Microsoft Excel has been a standard, universally employed tool. It promised to be easy to use and offered capabilities for companies that didn’t deal with complex labor or tax laws. In the past, advanced payroll software was also not easily available, and what was, was just too expensive.

But today, manually feeding complex payroll data into Excel sheets, building formulas, and processing mistake-free payroll is a lot to handle. As the business grows, there is a pressing need for solutions that automatically capture payroll data and enhance compliance with all the applicable laws and tax considerations.

The Problem with Excel

Manually processing payroll using Excel is a time and labor-intensive process. While small businesses may find this feasible, as the business grows, the complexities of payroll processing increase. Not only does Excel increase the chances of human error, but it also makes complying with state, union, and labor law mandates difficult – if not impossible. Since even a single mistake can lead to the creation of inaccurate records, it can lead to several repercussions, including non-compliance fees, poor reputation, and lost trust.

What’s more, finding the source of error can drain your HR team’s energy, compelling staff to manually validate all payroll data from scratch. If your business has complex compensation plans that need meticulous calculations, it may be impossible to manage complex salary structures or employee leaves using spreadsheets.

Here’s why there’s no place for Excel in today’s era of complex payroll processing and the consequences of doing union payroll wrong:

Accuracy

Manually processing union payroll on Excel also leads to several issues regarding accuracy that often go unnoticed. The probability of wrong data being entered, copied, or formulated is extremely high, and so is the likelihood of one wrong click undoing all the hard work – especially if a recent version of the file hasn’t been saved. Any wrong entry can lead to incorrect payroll and salaries and subsequently put the organization at risk of being penalized by the government.

Scalability

An entry-level software like Excel doesn’t quite scale with the modern construction enterprise. While an average user might be able to leverage Excel for simple use cases, it takes an expert to process complex payroll using Excel. Knowledgeable and highly trained staff are needed to scan through spreadsheets, leverage lookups, and put together formulas. These labor-intensive efforts limit how big organizations can get without growing their payroll departments while leading to several challenges in processing payroll in a timely and efficient manner.

Complexity

Excel sheets offer a quick and easy way to process payrolls when teams are small. But as the business grows, union payroll on Excel becomes more and more complicated. This is compounded when a company employs workers from several, or even dozens of labor unions in different jurisdictions With more employees and laws to keep up with, catering to different salaries, contracts, deductions, and taxes becomes cumbersome and time-consuming.

Compliance

For companies processing union payroll on Excel, the chances of payroll fraud are extremely high. Since the tool has no security controls governing it, it is easy for hackers (or even disgruntled employees) to mishandle or embezzle funds. Stealing funds they are not entitled to via falsified timesheets or unauthorized access becomes very easy, leading to several governance and compliance challenges.

Backup

Union payroll processing using Excel is also prone to crucial data being lost or misused. Because the tool lacks basic authentication and authorization mechanisms, even unauthorized users can easily gain access to sensitive payroll and salary data and exploit it for personal benefit. Not just that, if payroll data is not backed up regularly, a crashing system can lead to critical payroll data being lost forever.

Parting Ways with Excel

Detached point solutions like Excel offer an easy and simple way to process payroll for a handful of employees. But if you are a growing business that employs full-time, contract, and union employees, you need a payroll processing system that fuels your growth – and not limits it. CEM offers a robust union payroll processing platform that allows businesses to send accurate and timely invoices, track payments, fulfill contractual obligations, and accurately maintain books and records.

CEM’s cloud-based payroll solution offers accurate, timely, and reliable reports that can be used to:

• Manage the payroll processes of different states and unions while remaining fully compliant with labor laws.
• Handle complex payroll functions while determining proper union rates, differentials, overtime assessments, fringe benefit management, and payroll taxes under one roof.
• Streamline certified payroll management via automatic calculation and distribution of prevailing wages for workers.
• Maintain all employees’ details and working hours on a single database for quick access and end-to-end visibility.
• Capture each activity on the job site as it happens on the field and receive a bunch of automated reports, daily logs, and timecards
• Eliminate the use of paper-based spreadsheets to track and manage payroll, thus minimizing errors and ensuring clean information is fed back to the home office.
• Efficiently manage unions, fringes, tax rates, and pay history while streamlining timecards for multiple states, unions, and trades.
• Handle prevailing wage & Davis-Bacon data with automatic calculations and empower employees with a self-service portal.
• Make the most of timecard apps to integrate data seamlessly through the field management software.

Conclusion

The administrative challenges of managing hundreds of trade unions efficiently are many for any HR manager. From overseeing prevailing wages for thousands of craft to keeping a tab on applicable labor laws and taxes, at CEM, we understand the payroll complexities involved within the construction industry. Therefore, we have built a construction payroll software that simplifies union payroll and certified payroll reporting for federal and state workers, so you can transform your payroll for construction.

Ensure accurate construction payroll for multiple states and unions without having to reenter rates, fringes, or dues. Contact us to book a demo!